Biogas Tax Credit: Capitol Hill Has Not Completely Forgotten Renewable Energy

Photo-Matt-Churchill-Flickr
Photo-Matt-Churchill-Flickr

We don’t always dip our toe into the stormy waters of legislative advocacy, but when we do we usually focus our attention on the acute need to expand investment and production tax credits to biogas to ensure its parity with other renewable energy sources.

Legislation introduced in the U.S. House of Representatives July 31 brought the clean tech industry one step closer to a key milestone: the first-ever investment tax credit (ITC) for biogas production.

H.R. 6212 – introduced by U.S. Representatives Ron Kind (D-WI) and John Lewis (D-GA) –  addresses an acute need for the nascent biogas industry: expanding investment and production tax credits to biogas. This first-ever ITC for biogas will go a long way to ensuring its parity with other renewable energy sources.

As members of the House Ways and Means Committee – where all U.S. tax law originates – Reps. Kind and Lewis have crafted legislation that seeks to amend the Internal Revenue Code of 1986 to provide a 30% ITC for qualifying biogas technologies. This continues previous groundwork on the subject laid out by U.S. Senator Ben Nelson (D-NE) and Rep. Brian Higgins (D-NY), who previously sponsored production tax credits for biogas.

This legislation still has a ways to go, of course, as it must pass through possible hearings and votes at both the subcommittee and full committee levels. From there it would likely need to get attached (stand-along advancement is unlikely for this bill) to a larger legislative vehicle for ultimate House passage. Regardless of the ultimate outcome, this legislation has several key components, including its recognition of biogas not just as a fuel to generate renewable electricity but also as renewable substitute for natural gas in vehicles, industry and homes. The bill itself embraces a wide range of biogas technologies, including anaerobic digesters and other biological, chemical, thermal, or mechanical processes which produce biogas with a minimum 52% methane content.

Now that’s cooking with gas!

Jay Staunton is vice president, account services at Greenough.